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naraburns  nihil supernum  2yr ago (text post)   36610 thread views

Culture War Roundup for the week of January 30, 2023

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Because goods eventually wear out. Used clothes tear. Used cars break. Used houses subside. And only a small part of all purchased goods are on the market at a given time.

Thrift stores currently exist, many of them nonprofits. Why would anyone not buy all their clothes there at a 50-90% discount from retail?

Sorry, perhaps I was unclear. I understand why people buy actually new items instead of used items. The question is how the law defines "new" vs. "used" to avoid legal gymnastics to allow for legal tax evasion.

Thrift stores currently exist, many of them nonprofits. Why would anyone not buy all their clothes there at a 50-90% discount from retail?

This actually seems to be an interesting cultural thing. While division probably isn't actually quite so clean, I feel like a lot of people I know can be divided into "buys all clothes new, would never occur to them to shop at a thrift store" and "buys all clothes used, would never occur to them to buy new".

Ah, yes. That’s defined in the text of the bill as retail goods at point of sale: basically the point at which a finished new good is sold the first time. The FairTax is included on the receipt, and that good can never again be sold taxed.

I think the idea is that you only get to forgo paying taxes up to the amount of taxes that were paid for the new item. Usually used items cost less than new items so this is a total elimination of taxes but if you buy it "new" for $1 and sell it "used" for $1000 you still pay tax on $999

Presumably, the answer would be (I am not a Fairtax proponent but do support creating a VAT on new durable goods) to create some definition of used which precludes doing this. Eg must have been sold to an end user, must be through a specialized resale shop, etc. I would expect, like most regulations, that this would create counterintuitive scenarios and probably define different goods differently, but ‘vehicles must have at least 15,000 miles to be sold as used, while firearms can only be sold as used if through a licensed pawnbroker and not ordered from out of state(both of which are extremely plausible definitions of used for those particular goods)’ has the helpful side effect of employing the legions of CPAs that would otherwise be unemployed to fairtax.

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